InvestorQ : Have the RBI plans to give easy loans to NBFCs and mutual funds via banks really taken off?
Neelam Naik made post

Have the RBI plans to give easy loans to NBFCs and mutual funds via banks really taken off?

Answer
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Priyanka N answered.
4 months ago


Clearly, the RBI Governor Shaktikanta Das was not too happy with the progress of lending to NBFCs and mutual funds despite the existence of the special lending window. This was one of the major issues discussed by the RBI in its video conference with the commercial banks. Apparently, Mr. Das has pulled up banks for not doing enough on lending to NBFCs and supporting their liquidity efforts. Das has also expressed disappointment regard the weak response to Targeted Long Term Repo Operations 2.0 (TLTRO 2.0). This was basically aimed at funding NBFCs with more than 50% allocated to small and medium sized NBFCs. Under this facility, funds are made available to commercial banks by the RBI at 4% to on-lend to the NBFCs but the demand has been weak. The meetings were attended by Patra and Jain, besides other senior officers of the RBI. Most banks do not want to take on added credit risk in these troubled times. One option could be for the RBI or the government to directly lend to these NBFCs but that would entail a credit risk which the government of the day is not willing to take on.